Energy Wholesale Market Review, 4 September 2020

Headlines

Power and gas contracts saw mixed movements this week, with most near-term contracts rising and some seasonal contracts reducing. Day-ahead gas rose 12.5% to 29.80p/th, an eight-month high, continuing to find support from increased gas-for-power demand and ongoing maintenance on the Forties pipeline system. Day-ahead power fell 9.0% to £43.00/MWh, due to rising levels of wind output at the end of the week, but despite a fall in its gas counterpart. October 20 gas saw a large rise amid tightening LNG supplies for this coming Autumn, up 6.5% to 31.04p/th. Most seasonal gas contracts declined this week, down by 1.1% on average. An exception was winter 20 gas which increased 1.0% to 39.05p/th, but summer 21 gas slid 1.5% to 33.68p/th. Most seasonal power contracts followed their gas counterparts, with contracts falling on average by 1.1%. Winter 20 power expanded 0.2% to £51.09/MWh, while summer 21 fell 0.9% to £44.15/MWh. International commodities saw mixed, mostly relatively small, movements. Brent crude oil declined marginally while EU ETS carbon prices extended the previous weeks gains and at times went above €29/t.

Baseload electricity
  • Day-ahead power fell 9.0% to £43.00/MWh, as wind output picked up towards the end of the week.
  • October 20 power climbed 1.8% to £44.28/MWh and November 20 power increased 6.3% to £54.91/MWh.
  • Q420 power moved 2.0% higher to £50.00/MWh.
  • The annual October 20 contract lost 0.3% to £47.62/MWh, which was just 4.0% lower than the same time last year (£49.6/MWh) following several months of resurging prices.

Forward curve comparison

Baseload electricity Forward curve comparison 4 September 2020

Annual October Contract

Baseload electricity Annual October contract 4 September 2020

Peak electricity
  • Day-ahead peak power was up 2.1% to £48.00/MWh, despite a fall in its baseload counterpart amid colder weather and tighter forecast supply margins over peak periods.
  • October 20 peak power gained 3.4% at £50.32/MWh, but November 20 peak power decreased 1.0% to £62.06/MWh.
  • The annual October 20 peak power contract lost 1.7% to £53.8/MWh.
  • This is just 4.3% lower than the same time last year (56.22/MWh).

Forward curve comparison

Peak electricity Forward curve comparison 4 September 2020

Annual October contract

Peak electricity Annual October contract 4 September 2020

Seasonal power prices

Seasonal baseload power contracts

Seasonal power prices Seasonal baseload power contracts 4 September 2020

Seasonal baseload power curve

Seasonal power prices Seasonal baseload power curve 4 September 2020

  • Most seasonal power contracts declined this week, down on average by 1.1%.
  • Winter 20 power expanded 0.2% to £51.09/MWh, while summer 21 fell 0.9% to £44.15/MWh.
  • Most seasonal peak power contracts boosted this week, up 1.6% on average.
  • Winter 20 and summer 21 peak power increased 2.1% and 1.3% respectively, falling to £59.23/MWh and £48.37/MWh.
Commodity price movements

Oil and Coal

Commodity price movements Oil and coal 4 September 2020

Carbon

Commodity price movements Carbon 4 September 2020

  • Brent crude oil prices remained relatively unchanged this week, falling slightly to average $44.97/bl.
  • Prices have now stabilised following recent spikes at a near five-month high.
  • The news this week concerning Hurricane Laura weighed on prices amid fears of production disruption.
  • Early reports indicate that the threat of extensive damage from Hurricane Laura was avoided as the hurricane was downgraded from a Category 4 to a tropical storm.
  • API 2 coal prices rose 4.6% this week to average $57.06/t.
  • Following recent gains, EU ETS prices rose a further 1.6% to average €28.56/t this week.
  • The market experienced mixed movements and volatility this week, with EUA’s briefly lifting above €29/t on 3 September.
  • The carbon price held onto these gains for the remainder of the week supported further by prices lifting comfortably over €28/t following the biggest auction in a five week period.
Wholesale price snapshot 

Wholesale price snapshot 4 September 2020

Posted by TEAM on 4 September 2020
  • Wholesale Market

    • 2020 (39)
    • +2019 (50)
    • +2018 (17)
  • Blog & News Archive

    • 2020 (65)
    • +2019 (87)
    • +2018 (59)
    • +2017 (32)
    • +2016 (33)
    • +2015 (57)
    • +2014 (26)
    • +2013 (13)
    • +2012 (8)
    • +2010 (1)